Saturday, July 26, 2008

Co-operative deferralism

Co-operative federalism sounds good in theory.  In theory, after the election of the Rudd government Australia was going to have lots of cooperative federalism.  Wall-to-wall Labor governments were supposed to be able to agree to all sorts of things that were going to make life cheaper and easier for business.

So far it hasn't quite worked as everyone had hoped.  After meetings of the Council of Australian Governments the prime minister and premiers issue their press releases heralding new dawns of co-operation.  But as usually happens, the reality is different.

Take for example the issue of harmonisation of the country's occupational health and safety (OHS) laws.  OHS laws are important, but there's a fine line between ensuring employers maintain a safe workplace and having employers live in fear of draconian penalties for a minor breach.

Labor governments and trade unions never miss an opportunity to preach about employers' responsibilities.

Warnings about the dire consequences if ever those responsibilities are not fulfilled are hard to miss -- they're on billboards, on television, on radio, and in newspapers.  Even the banners that AFL football teams run through as they enter the field have been commandeered to get the message across.

After the COAG meeting a few weeks ago a grandly titled, 15-page "Inter-Governmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety" was issued.  It proclaims that the federal, state, and territory governments are all committed to improving the health and safety of Australian workers and all governments are committed to working co-operatively to harmonise OHS legislation.

Importantly for business, the agreement is designed to "address the compliance and regulatory burdens for employers with operations in more than one jurisdiction".  So far so good.  The problem arises when you read what the state governments have signed up to -- which isn't much at all.  There was a hope from employers that a national OHS scheme would see the end of the OHS laws operating in NSW.

From what we now know, that hope seems pretty forlorn.  When business groups ask for harmonisation they should be careful what they ask for.

Harmonisation can just as easily produce bad law as good law.  A central feature of the NSW system is that unions can launch private prosecutions for breaches of the OHS regulations, and the unions get to keep the cash from the fines that employers pay.

In NSW trade unions have as much incentive to behave ethically as did tax collectors in ancient Rome.

Harmonising the country's OHS laws following the NSW model would provide consistency, but would be a disaster.

The OHS experience demonstrates how Kevin Rudd's co-operative federalism works in practice.

In practice, state government can veto anything they don't like.  Changes to the inter-government agreement can only be made with the unanimous agreement of the federal and state governments.

The incentive is huge for a recalcitrant state government not to agree to anything until it gets a sufficiently large pay-off in cash or kind from the commonwealth.

Harmonisation of national OHS laws is intended to come via "model" legislation to be developed "co-operatively".  But once this model legislation is drafted, there's no actual requirement on state governments to implement it.  All that states need to do to comply with the agreement is to "take all necessary steps to enact or otherwise give effect to model OHS legislation".

No one knows what "all necessary steps" means.  There are a few other "get out of jail free" clauses.  States need only implement the model OHS legislation "as far as possible having regard to the drafting protocols in each jurisdiction".

To avoid having to do anything they don't want to do, state ministers can rely on the convenient excuse of "drafting protocols".

And then there's the clincher.  In the words of the agreement:  "The adoption and implementation of model OHS legislation is not intended to prevent jurisdictions from enacting or otherwise giving effect to additional provisions, provided these do not materially affect the operation of the model legislation, for example, by providing for a consultative mechanism within a jurisdiction."

Translated this means that for all intents and purposes NSW can keep its OHS system and the other states can keep theirs.

If the experience of OHS reform thus far is anything to go by, real reform of federal and state relations is a still a long, long way off.


No comments: